Question for everyone ? or maybe the 'Experts'

angryuser

Having read almost every thread since its start, and absorbed that non-technical stuff of interest, I am left with one overiding question. This question has been generated by reading constantly of eircom's faults, refusal to cooperate, overcharging for the use of their 'local loop' by other ISP's, their total control of this local loop, and the general attitude of "its all their fault" amongst contributors. The question is this: If all that has been said is true, and I have no reason to doubt it, then surely Eircom are in 'pole' position to offer an 'no limits service' for whatever monthly fee they want to charge, and therebye haul into the Eircom net just about every internet user in the Country ? Right, or wrong ? If the answer is 'right' then why do they not do it ?
Maybe I am missing something, or have missed a thread, or do not fully understand the problem ?? If not, I have no doubt I will be 'enlightened' fairly fast. !! I fail to see what is stopping eircom from reaping a harvest by not introducing a 'no limits' service ?
Lets suppose they say it is 'uneconomic'. How can they know without introducing it first, and then grading their charge to ensure that they make a profit ? It has been stated here, many times, that users would pay £40 a month, some even more and up to £60 a month for this service, so surely 'that' kind of money, if it were necessary would reap economic rewards for eircom ??
Maybe I am just an 'ignorant' cus, and don't know all the facts ?
A p.s. for "bard". Why do we not, or could be hold a survey, to find out from members and contributors what 'their' priority is in regard to the service they want ? Do the majority just want a 'no limits' service, that which we enjoyed before, or do they want more ? What is their 1st priority, their 2nd, and so on ?
The results could make interesting reading ?? :cool:

hmmm

Because quite simply they are at this moment creaming absolutely enormous profits by charging per minute.

e.g. in the UK you can get 24x7 internet access for about £12, which is the price as established by the UK regular would provide a fair return to BT.

In Ireland the same would see you paying over £400 to Eircom. It's pretty obvious that this is absolute gouging of Irish customers.

Why should they offer flat rate access for £40 when they can get 100s of pounds out of the same customers by stalling and delaying and being supported all the way by regulator and government incompetence.

Also, because they're a regulated entity, they would be required to offer an equivalent service to others who may wish to offer the service. They can't simply get the jump on all the others. (well they can I suppose, as in the case of bitstream adsl by laughing at the regulator and going ahead with it anyway).

angryuser

thanks. Hmmm. Getting 'wiser' all the time. !!:)

SkepticOne

Originally posted by angryuser
The question is this: If all that has been said is true, and I have no reason to doubt it, then surely Eircom are in 'pole' position to offer an 'no limits service' for whatever monthly fee they want to charge, and therebye haul into the Eircom net just about every internet user in the Country ? Right, or wrong ? If the answer is 'right' then why do they not do it ?

From my armchair I can see a couple of reasons.

1. Essentially they have every internet user. You can go with another ISP but this is a fairly low margin business - no great loss to Eircom.

2. If Eircom offer flat rate then they must offer it to other ISPs on a wholesale basis. This wholesale rate must be cost based (like bitstream).

ando

I've said it before and I'll say it again, we'll see broadband before we see flat-rate.
I'm certain the ODTR will get around to the flat-rate issue, but for the close future I'm sure her priority is to get adsl going ... But as I remember, she already gave out the 1892/1893 numbers for flat-rate access, and then she said thats all she could do. The other OLO's were to negotiate with eircom to make flat-rate happen ?

One thing for certain, eircom won't bring in flat-rate until they are forced, they are simply making to much money to give it up easily.

Urban Weigl

Originally posted by ando
I've said it before and I'll say it again, we'll see broadband before we see flat-rate.

More like some people will see broadband before flat-rate. And in fact, some people have already seen broadband before flat-rate (PowerNet in Limerick for example). The fact is that Eircom does not have any plans to rollout broadband nationwide, in fact they are going to limit it to certain areas in Dublin only.

chernobyl

Originally posted by hmmm
Because quite simply they are at this moment creaming absolutely enormous profits by charging per minute.

e.g. in the UK you can get 24x7 internet access for about £12, which is the price as established by the UK regular would provide a fair return to BT.

Actually [just to b|tch with you], if you used all the offpeak hours, you pay £400 and if you used the all the peak hours in the 2months then that costs [@3p/min] £720.

hmm...£15 sterling or £1120 irish.

R. Daneel Olivaw

Ironically, that monthly charge of £1120 is roundabout almost bang-on the yearly ADSL charge of £1122.768 (£93.564 x 12).

Intended or VERY SCARY COINCIDENCE!?

SkepticOne

Originally posted by R. Daneel Olivaw
Ironically, that monthly charge of £1120 is roundabout almost bang-on the yearly ADSL charge of £1122.768 (£93.564 x 12).

Intended or VERY SCARY COINCIDENCE!?

You should go on that Countdown show on Channel 4.

R. Daneel Olivaw

Yeah I would but I suck when I don't have Windows Calculator with me ........I suppose it really was worth the ......eh......92k of diskspace sacrificed !

angryuser

Actually my charges are as follows: Offpeak 0.8p per min =48p per hour. Hrs per month = 56. Cost £26.88 Peak: 1.16p per min = 96p per hour. Hrs per month = 20. Cost £19.20. Total Cost per month £46.08 plus standard monthly charge of £14. Grand total therefore £60 p.m. So, they could charge me £60 per month for a Flat rate no limits service, and loose nothing ? I would gain as I would be online a lot longer during offpeak hours ? On the question of Eircom's income, surely the intro of a no limits service would attract almost "everybody" from "all" other ISP's ?? This would increase Eircom's income by a substantial amount ?
I accept the point about their being forced to offer other ISP's a flat rate service also, but the economics of that would have to be a higher charge to those ISP's than it would actually cost Eircom, therebye forcing other ISP's to charge a higher rate for their No limits service, which users would not accept, as they could get a lower cost by using Eircom ?? I do not think any Regulator would force Eircom, to charge other ISP's a lower amount than they (eircom) charge their customers, as I believe this would be legally unenforceable ?? Maybe I have it wrong ?? Even if they were forced to charge other ISP's slightly less, after the ISP has added their profit margin, the price they would charge their users would have to be higher than Eircom's ??

SkepticOne

Originally posted by angryuser
I accept the point about their being forced to offer other ISP's a flat rate service also, but the economics of that would have to be a higher charge to those ISP's than it would actually cost Eircom, therebye forcing other ISP's to charge a higher rate for their No limits service, which users would not accept, as they could get a lower cost by using Eircom ??

Yes, the actual cost to eircom would have to be worked out, and then a reasonable margin added. This would then be the amount Eircom could charge to other ISPs including Eircom's ISP Eircom.net.

I do not think any Regulator would force Eircom, to charge other ISP's a lower amount than they (eircom) charge their customers, as I believe this would be legally unenforceable ??

But Eircom don't supply Internet access directly to the public. Eircom's customers are in fact the ISPs themselves which include Eircom.net.

The idea here is that Eircom must charge other ISPs the same as they charge their own ISP Eircom.net. If it were just this, then Eircom, could charge its own ISP a very high price since the cost would be absorbed within the Eircom group as a whole. So, in addition to this, Eircom must justify the charge on the basis of cost i.e. cost + reasonable profit margin.

This (in theory) makes it fair on the other ISPs. The only problem, is that Eircom can get around it by simply not offering the product in the first place.

This is the crux of the matter, IMHO. There is no organisation that can say to Eircom, "Look, Eircom, other countries are bringing out this flat-rate thing. We now require you to do so. How much will it cost?"

angryuser

Thanks for your post. Surely we are sort of 'splitting hairs' here ?
I referred to Eircom as 'Eircom' the whole company. Not as Eircom and Eircom.net as different companies. The 'supposed' split up into two organisations is surely a ploy ?? Eircom, whether you call them Eircom or Eircom.net is in actuality one company. Maybe it could be said that they are subsiduaries of each other, but they are still one company. We often do this kind of splitting up in business, but at the end of the day the results of all branches are consolidated into one set of 'company' accounts.
I believe Eircom only split (in theory) the internet arm as a ploy to be used exactly as it is being used now. i.e; as a weapon to fight other ISP's and other competition. It matters not where the revenue comes from, at the end it all goes into "eircom's" coffers !! One has to admit that their 'ploy' is working well, as they can use it to tell other ISP's that "we are charging our own Net organisation £x, so you the competition have to pay the same £x." Yet in reality that charge to Eircom.net is only a 'book' entry, and not an actual expense as they are 1 and the same company !!

R. Daneel Olivaw

Yup, it's like the different between the MS Office team and the Windows team. The original talk was about e.g., splitting them up, but it's sort of futile.

Only at least in OS terms you have a choice (somewhat). I don't understand fully what the problem with LLU is at all. Originally I thought it meant Eircom could no longer charge other companies for access to the last mile, that they could not get their "cut" so to speak.

But I don't know......if they don't own it and it's "unbundled" who own's it? Do I? Hehhe?

SkepticOne

We may be talking at cross-purposes here.

Going back to what you were saying:

I accept the point about their being forced to offer other ISP's a flat rate service also, but the economics of that would have to be a higher charge to those ISP's than it would actually cost Eircom, therebye forcing other ISP's to charge a higher rate for their No limits service, which users would not accept, as they could get a lower cost by using Eircom ?? I do not think any Regulator would force Eircom, to charge other ISP's a lower amount than they (eircom) charge their customers, as I believe this would be legally unenforceable ?? Maybe I have it wrong ?? Even if they were forced to charge other ISP's slightly less, after the ISP has added their profit margin, the price they would charge their users would have to be higher than Eircom's ??

I believe you are saying that Eircom could price external ISPs out of the market through a high wholesale price for FRIACO.

For regulatory purposes, Eircom (the group) supplying flat-rate internet to the customer is composed of two parts.

1. A wholesale FRIACO product supplied by Eircom to Eircom.net.
(as you say, this is just accounting, no money changes hands at the group level).
2. A flat-rate internet product supplied by Eircom.net to the customer.

I think we can agree that if there were (a) several telcos competing for many ISPs custom and (b) none of these ISPs were owned by any telco, there would be no problem. The cost to the ISP of FRIACO would, through competition, be reduced to the actual cost to the telco + some profit margin. Competition amongst the ISPs would lead to a reasonable price being passed on to the end-customer.

However, both (a) and (b) are not true.

i) Since (a) is not true, we have the cost-orientated rule ie. the wholesale price for FRIACO must be cost-oriented + a reasonable profit margin (as if there were competition at the wholesale level).

ii) Since (b) is not true, we have the non-discriminatory rule i.e. the telco must charge its own ISPs what it charges its other ISP. (as if it were a separate ISP).

"but the economics of that would have to be a higher charge to those ISP's than it would actually cost Eircom"

Obviously, Eircom might like to charge the ISPs far more, it can't because of cost-orientation.

Eircom can get around both of these in two ways.

1. Not offering the product at all (this is what they are threatening to do with wholesale DSL) though I believe another rule says that they can't turn down reasonable requests for a particular product.

2. Claiming that it costs them far more than it really does to provide the wholesale product (I am not saying that they would actually do this!)

That is my understanding of the reasoning behind it. It seems to work in theory. I don't work for the ODTR. I am a completely independent armchair expert. Please contact the ODTR for the full story.